Health spending for insurers rose by nearly $1 billion over two years as providers billed for more severe care, according to a Blue Cross Blue Shield Association study released this week.
The analysis covers inpatient billing. Coding of secondary conditions climbed across 2024 and 2025. Those are illnesses separate from the one being treated, and they added $653 million for Blue Cross plans. Spending tied to more intensive care reached $942 million against 2023.
Documentation is the mechanism. Providers leaned on AI to surface secondary conditions, either by scanning records they already held or through ambient scribes that listen in on visits and draft the note. Higher-complexity documentation draws higher payment, and coexisting conditions can be graded as more severe.
The association’s numbers suggest coding moved faster than treatment. For patients undergoing major bowel surgery, secondary conditions such as partial intestinal blockages and acid overload rose 55% and 33% respectively between early 2023 and late 2025, while rates of treatment for those patients did not climb.
Luke Chalker, a senior vice president at the association, put the test simply: if patients are genuinely sicker, more treatment should follow. Razia Hashmi, its vice president of clinical affairs, noted the same mismatch in anemia cases.
The association represents 31 independent insurers covering more than 100 million people, and some carriers have already called out what they see as aggressive reimbursement requests. The fight now moves to how AI-drafted documentation gets audited.
